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To: Zardoz who wrote (21664)	10/14/1998 9:42:00 PM
From: teevee	Respond to of 116764

Hi Hutch, In order to help explain the assortment of comments on this thread you need to know that many "gold bugs" have a sickness called gold fever. This is a real malady. I have seen grown, mature men and women throw away a life's savings in short order. Their eyes are glazed over, transfixed on who knows what, and their mental facaulties are impaired, and they exude a sense of paranoia. IMO, this does not seem to be a state in which to make detached, rational, reasonable investment decisions. However, as a lurker on this thread, it is entertaining, and from time to time, profitable. regards, teevee

To: Zardoz who wrote (21664)	10/14/1998 9:59:00 PM
From: E. Charters	Read Replies (4) \| Respond to of 116764

The thing is 8000 tons is not a small amount. It is many years of world supply. It is worth 70,000,000,000 dollars. That ain't hay. The producers sold it to the people who borrowed more gold from the central banks. Those borrowers sold this borrowed gold in turn. So a bunch of bankrupt borrowers owe the banks 8,000 tons of gold. What are they to do? The producers cannot deliver at these prices. The amount sold after they bought the producer's gold forward exceeds the amount deliverable. It is a classic short squeeze. Barrick and Dome's production exceeds 6 million ounces in 1999. That is 205 short tons. But it is far far short of 8,000 and this 205 tons equals' the United State's entire output for one year. To put it in perspective South Africa used to dominate world supply, producing 75% of the worlds gold at a rate of about 750 tons per year. That means we are at least eight years short of the world supply rate right now. This is not just disturbing, it is staggering. When the market was short 75 tons in 1985 the price rose 50 dollars in three days. Something is very strange in the market. The pressure downward on gold is political as it would make the world's largest economy look very weak if gold hits it true value, of between 700 and 1200 dollars an ounce. EC<:-}

To: Zardoz who wrote (21664)	10/14/1998 10:08:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116764

Dollar Steady vs Yen: Japan's Recession Offsets Hedge Fund Selling Concern Dollar Steady vs Yen: Japan's Recession Offsets Selling Concern Tokyo, Oct. 15 (Bloomberg) -- The dollar was little changed against the yen, after rising for a third day yesterday, as concern about Japan's recession offset speculation that hedge funds may buy yen to pay back loans that financed investments. Because Japan is in its worst recession in more than 50 years, the Bank of Japan won't lift interest rates from record low levels anytime soon. That prompts Japanese to sell yen for dollars and other currencies to invest abroad for higher returns. ''Unless hedge funds start to sell dollars furiously, the dollar will be supported against the yen,'' said Takeshi Imamichi, a foreign exchange manager at Industrial Bank of Japan. ''There's a tug of war going on between hedge funds selling near 120 yen and Japanese investors buying the dollar when it dips.'' The dollar was quoted at 118.60 yen, down from 118.70 yen in late New York trading yesterday. It was quoted at 1.6370 marks, down from 1.6395 marks in New York. The U.S. currency yesterday climbed for a third day, rising as high as 120.18 yen, because Japanese took advantage of the dollar's 14 percent decline last week to buy the currency at cheaper levels. In its biggest weekly decline since 1971, the dollar touched a 16-month low of 111.58 yen on Oct. 8. It's down 19 percent from an eight-year high of 147.66 yen on Aug. 11. Investing Abroad ''Japanese won't stop investing in dollars,'' said Katsumi Ueno, deputy general manager of the retail section at Nikko Securities Co., whose net increase in Japanese investment in dollar-denominated money market funds totaled $146 million between Wednesday and Friday last week. ''Their choice of investment is limited,'' he said. ''They can't park all of their money in Japanese bank deposits, which provide a mere 0.2-0.3 percentage point return.'' Returns on yen-denominated investments are so low because the Bank of Japan has kept the discount rate, at which it lends money overnight to banks, at a historic low of 0.5 percent since September 1995. Because the Japanese government expects the economy to shrink 1.8 percent in the year ending March 31, the central bank isn't likely to raise the rate anytime soon. By comparison, the U.S. federal funds rate on overnight loans between banks is 5.25 percent. ''As long as Japanese continue to buy dollars, the dollar won't fall dramatically,'' said Tetsuhisa Hayashi, a foreign exchange manager at Bank of Tokyo-Mitsubishi Ltd. Weighing on Dollar IBJ's Imamichi said he doesn't expect the dollar to rise above 120 yen this week because hedge funds -- which speculate in stocks, bonds and currencies on behalf of wealthy investors -- may buy yen to pay back loans that financed investments in global financial markets. In the past three years, funds borrowed yen at Japan's record-low lending rates and converted the proceeds into dollars for investment. After Asia's economic crisis spread to Russia and Latin America in the past few months, the funds began to reverse so-called yen-carry trades. Meanwhile, the dollar reacted little when Japan's Finance Ministry announced the country's current account surplus expanded 19.6 percent in August from July to 1.5707 trillion yen ($13.2 billion). The surplus -- the value of all goods and services going in and out of the country -- rose 43.6 percent from August 1997 to 1.1576 trillion yen. In other trading, the dollar was quoted at 1.3310 Swiss francs, down from 1.3357 Swiss francs in late New York trading yesterday. The British pound was quoted at $1.7077, up from $1.7041 in New York. The mark was quoted at 72.43 yen, up from 72.40 yen in New York. bloomberg.com